Incisive Research: Nordic selectors want specialist performance

By: Jonathan Boyd | 20 Dec 2011

Results from the Incisive Strategy Research & Consulting survey of Nordic fund and asset selectors suggests that outright performance still beats objectives such as ESG, and that they are looking for that performance from specialists rather than more traditional managers.

The research results were based on responses from 21 selectors across the region, and representing a spread of assets under management.

Half of the respondents worked for firms with more than €1bn under management. A quarter, 28%, of respondends said their clients held more than €1bn in third party funds, sold by their institutions.

More than three quarters of the selectors, 72%, expected an increase in the assets under management within third party funds over the next year. Where selectors rely on white labeling of third party funds – about half of them do – the proportion allocated this way is about 25%. A fifth of those using third party funds do not rely on white labeling at all.

Where third party funds are dominant is foreign equity. Nearly all, 95%, of the respondents said they offer third party funds for foreign equity, while 25% offer it for property and private equity.

Alternative asset classes are also becoming more popular the research shows. Half the respondents said they expected to increase their exposure to hedge funds, private equity and infrastructure.

By contrast, more than half, 60%, said they expected exposure to cash/deposits to decrease in the next 12 months.

Consultants

Given the widespread use of collective investments and packaged products in certain Nordic markets, it might be expected that the use of consultants would be pervasive. However, the research shows that this is not necessarily the case.

More than half, 62%, of respondends said they do not employ investment consultants to held with fund selection or monitoring. The source of those consultants varied between the global names such as Mercer, and the more local such as SEB, Nordea and Carnegie